AMD spikes after Amazon makes a big bet on its new processors
- AMD held a "Next Horizon" event on Tuesday, unveiling its 7-nanometer graphics products and microprocessors.
- During the event, AMD said Amazon will use its new processors for Amazon Web Services.
- That will give some Amazon Web Service customers lower prices for their cloud services.
- Watch AMD trade live.
AMD was rallying on Tuesday, up 7%, after Amazon said it would use AMD's new line of processors for its cloud business.
During AMD's "Next Horizon" event, the chipmaker unveiled its 7-nanometer graphics products and microprocessors, and said it was partnering with Amazon Web Services (AWS) to provide new general purpose (M5 and T3) and memory-optimized (R5) instance types with AMD EPYC processors that are 10% less expensive than the current M5, T3, and R5 instances.
Simply put, the agreement will give some customers lower prices for their Amazon cloud services.
The AMD-based instances provide additional options for customers who are looking to achieve cost savings on their Amazon EC2 compute environment for a variety of workloads, such as microservices and virtual desktops, Amazon said in a press release.
"One thing our customers agree on is that they all like lower prices," said Matt Garman, vice president of AWS in a statement.
"Apart from adding to what is already the broadest and most capable set of compute services available in the cloud, these new AMD-based instances give customers an even lower priced way to run many of the most common applications."
While Amazon showed confidence in AMD's new 7nm data-center products, Morgan Stanley analyst Joseph Moore was bearish about the new lineup ahead of the event.
"Based partly on feedback from AMD, we wanted to be clear that EPYC 2 will not be shipping for revenue until next year (which has been our expectation), and calling this a product launch is probably an overstatement," Moore said. He has a sell rating and price target of $17 for AMD - 15% below where shares were trading.
AMD was up 94% this year.
Read more stories on AMD:
- AMD has tumbled into a bear market - here's why analysts say it's time to buy
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- AMD's stock price reflects a 'scenario we don't believe possible,' analyst says
